[op-ed snap] The minimum wage solution
The government made two recent announcements to mitigate the economic crisis.
- One is a new indexation of NREGA wages to increase rural incomes.
- Second is a reduction in the corporate tax rate.
Indexation of wages
- Prices of commodities increase each year.
- So it’s important to accurately estimate how much NREGA labourers should earn in 2020 if she earned ₹179 (national daily average NREGA wage) in 2019.
- This needs a good index to benchmark and revises the wages.
- The index must be based on the main items of consumption for rural households.
- NREGA daily wages are to be indexed with an updated inflation index called the Consumer Price Index-Rural (CPI-R) instead of the older Consumer Price Index-Agricultural Labourers(CPI-AL).
- The calculation of CPI-AL involved more food items in the consumption basket. Calculation of CPI-R involves more non-food items such as healthcare and education.
- CPI-R better reflects the rural consumption basket compared to CPI-AL.
Challenge with the indexation
- This new indexation will have a sizeable impact on the increase in rural incomes only if the base NREGA wages are high.
- If we assume a 10% increase in wages due to the new indexation, then NREGA wages in Kerala at ₹271 per day would become ₹298. If NREGA wages were equal to the State minimum wages, the wages in Kerala would increase from ₹490 to about ₹540.
- A substantial increase in NREGA wages and subsequent indexation with CPI-R would be meaningful for the workers and the economy.
- Barring three States/UTs, NREGA wages are still lower than the State minimum wages in violation of the law.
- Minimum wages are neither a dole nor an act of charity. They are arrived at by calculating the minimal nutritional requirement and basic needs of an individual.
- The Fair Wages Committee of the Ministry of Labour noted in a report that a “living wage” should also include education, healthcare and insurance besides the bare essentials.
- In Sanjit Roy v. State of Rajasthan (1983), the Supreme Court held that paying less than minimum wages is akin to “forced labour”.
- In Workmen v. Management of Raptakos Brett (1991), it said that the aforementioned provisions must be added to arrive at a moral “living wage” to ensure basic dignity of life.
- The current daily NREGA wages are just a quarter of the minimum daily living wage of ₹692 as outlined in the 7th Pay Commission.
- The last annual NREGA budget is ₹60,000 crore. The budget allocation for NREGA gets exhausted by October of each financial year, leading to delays in payment of wages. These are all legal violations.
- In circumstances of unsustainable wages, the poor would be forced to become part of the migrant labour force.
Corporate tax cuts & Inequalities
- The current corporate tax cut will only widen economic inequality.
- According to the Oxfam Inequality Report 2018, in one year, the wealth of the richest 1% in India grew by ₹20.91 lakh crore, which is equivalent to the 2017-18 Budget.
- According to estimates by CRISIL, due to the recent tax cut, 1,000 companies would have annual savings of around ₹37,000 crore.
- According to a 2015 IMF report, “if the income share of the top 20% increases, then GDP growth actually declines over the medium term, while an increase in the income share of the bottom 20% is associated with higher GDP growth.
Challenges if not matched with rural needs
- Corporate tax cuts and lower interest rates would give corporations some liquidity, it is unlikely that rural demand will increase.
- Without a substantial increase in NREGA wages, the wages would barely match inflation levels leading to wage stagnation in real terms.
- It is economically prudent to substantially increase the budget for public programmes such as NREGA. This would lead to higher disposable income for the poor and have positive multiplier effects in the economy.
- Jean Dreze and Amartya Sen’s poignant imagery of India having pockets of California in a sea of sub-Saharan Africa is still eerily true.
[op-ed snap] How MGNREGA transformed into a monument of failure
- There is now a plethora of evidence that the economy has been cooling down over the last three years.
- Official data was slow to pick up the trend, but data from private sources on indicators such as sales of consumer durables and automobiles clearly show that it is largely a result of declining demand, particularly in rural areas.
- The Union budget presented on 5 July was expected to address some of these concerns.
- However, it was a missed opportunity, with no effort being made to increase spending in rural areas, except for the electoral promise of cash transfer to farmers.
Effect of decline in Allocation to MGNREGA
- Also disappointing was the government’s approach in dealing with most rural development programmes.
- These not only directly contribute to creating rural infrastructure and assets, but also indirectly help increase rural demand and employment. For most of these programmes, the budget expenditure was kept constant or lowered.
- Of particular importance is the all-India scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
- Its budget allocation has fallen compared to the revised expenditure of last year, and is insufficient, given the wage-payment arrears.
Weakening of MGNREGA
- The National Democratic Alliance (NDA) showed apathy towards the rural and agricultural sectors during its first term in government, and in many ways is continuing the flawed policies of the second term of the United Progressive Alliance (UPA) government.
- The UPA, which enacted MGNREGA and reaped political dividends for its successful rollout during its first term, contributed to the weakening of the programme as well as the changing of its basic character.
- The government kept the budget allocation low and created administrative bottlenecks that stifled the programme. This trend has continued under the NDA.
- This alliance also altered the basic character of the scheme.
Original Vision for MGNREGA
- MGNREGA was envisaged as a provider of rural employment to casual workers at government-mandated minimum wages set above market wages.
- This was the case at its 2006 launch.
- The National Sample Survey Office (NSSO) has been tracking wages received by casual workers employed under MGNREGA and private markets since 2007-08, when it introduced a separate category for MGNREGA work.
- This has been retained even in the Periodic Labour Force Survey (PLFS), the report of which was released recently.
- In 2007-08, the second year of MGNREGA implementation, wages under the programme were 5% higher than market wages for rural male workers and 58% higher for rural female workers.
- This was one of the reasons that the programme attracted almost 50% female workers, in contrast to the trend of declining female workforce participation since 2004-05.
Changes in structure
- By 2009-10, MGNREGA wages were only 90% of market wages for males, but 26% higher than market wages for females.
- By 2011-12, they were lower than market wages for both category of workers, but for females, they were close to market levels.
- The 2017-18 PLFS estimates show that private market wages for males were higher than MGNREGA wages by 74%, and female market wages were higher than MGNREGA wages by 21%.
- Clearly, no male worker is going to demand MGNREGA work when he can get a much higher daily wage with the same effort .
- However, women continue to demand and work under MGNREGA, though market wages are higher, because of non-availability of work and discrimination as well as exclusion from the private labour market.
Women participation more
- A peculiar result of this is the overwhelming participation of women in MGNREGA in southern states, where casual wages are higher in general, with Kerala reporting only female workers.
- However, many states, including Gujarat, did not report any MGNREGA work in 2017-18. Keeping MGNREGA wages significantly lower than market wages is a deliberate attempt to finish the programme.
Half of the national minimum wage
- MGNREGA wages are less than half of the national minimum wage of ₹375 per day (as on July 2018) proposed by an expert group.
- Even the Economic Survey presented on 4 July has a chapter on minimum wages, which argues in favour of keeping minimum wages at a sufficiently high level to reduce poverty and inequality.
- At a time when the government is pushing for a minimum wage code, the largest government-run programme has been violating state minimum wages for almost a decade.
- MGNREGA could have been the lifeline to revive the rural economy, which is in distress.
Ineffective MGNREGA at present
- However, the political slugfest and flawed policies of the government have led to a situation where MGNREGA, bereft of its original character, is unable to provide a stimulus to the rural economy, despite the strong evidence of it having pushed up rural wages and incomes during the first five years of its implementation.
- It also created rural infrastructure and provided much-needed employment to the country’s rural population.
[op-ed snap] The solution is universal
Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.
From UPSC perspective, the following things are important:
Prelims level: Basic knowledge of comparison of MGNREGA and PM-KISAN .
Mains level: The news-card analyses how strengthening the MGNREGA would be more prudent than a targeted cash transfer plan like PM-KISAN, in a brief manner.
- According to several experts, strengthening the MGNREGA would be more prudent than a targeted cash transfer plan like PM-KISAN.
- Rural distress has hit unprecedented levels.
- According to news reports, unemployment is the highest in 45 years.
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
- To allay some misgivings of the distress, one of the announcements in the Budget speech was that vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support at the rate of ₹ 6,000 per year.
- This cash transfer scheme has been called Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
- The Ministry of Agriculture has written to State governments to prepare a database of all eligible beneficiaries along with their Aadhaar numbers, and update land records “expeditiously”.
- The letter further states that changes in land records after February 1, 2019 shall not be considered for this scheme.
Is PM-KISAN a reasonable solution?: Comparison with MGNREGA
- Undoubtedly, farmers’ distress needs urgent attention but one need to analyse if the PM-KISAN is a reasonable solution.
- Let us first compare some basic numbers with the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
- MGNREGA earnings for a household is more than a year’s income support through PM-KISAN
- For example, if two members of a household in Jharkhand work under MGNREGA (picture) for 30 days, they would earn ₹10,080 and a household of two in Haryana would earn ₹16,860 in 30 days.
- Jharkhand has the lowest daily MGNREGA wage rate, and Haryana the highest.
- Put simply, a month of MGNREGA earnings for a household is more than a year’s income support through PM-KISAN anywhere in the country.
2. MGNREGA is a universal programme
- PM-KISAN is a targeted cash transfer programme and MGNREGA is a universal programme.
- Any rural household willing to do manual work is eligible under the Act.
- According to the 2011 Socio-Economic and Caste Census, around 40% of rural households are landless and depend on manual labour.
- The landless can earn through the MGNREGA but are not eligible for the PM-KISAN scheme.
- Notwithstanding the meagre amount, the PM-KISAN might be pitting the landless against a small farmer.
Other factors that strengthen the case for an existing universal programme
- It is unclear how tenant farmers, those without titles, and women farmers would be within the ambit of the PM-KISAN scheme.
- There is also substantial evidence to demonstrate that universal schemes are less prone to corruption than targeted schemes.
- In targeted programmes, it is very common to have errors of exclusion, i.e., genuine beneficiaries get left out.
- Such errors go unrecorded and people continue to be left out.
- It is in some of these contexts that strengthening an existing universal programme such as the MGNREGA would have been a prudent move instead of introducing a hasty targeted cash transfer programme.
Lessons to be learned from the MGNREGA implementation
- The Agriculture Ministry’s letter states that “funds will be electronically transferred to the beneficiary’s bank account by Government of India through State Notional Account on a pattern similar to MGNREGS”.
- There are important lessons to be learned from the MGNREGA implementation.
- The Centre has frequently tinkered with the wage payments system in the MGNREGA.
- It’s creditable that timely generation of pay-orders have improved, but contrary to the Centre’s claims, less than a third of the payments were made on time.
- And in contempt of the Supreme Court orders, the Centre alone has been causing a delay of more than 50 days in disbursing wages.
Field realities: hurried bureaucratic reorientation on the ground
- Moreover, repeated changes in processes result in a hurried bureaucratic reorientation on the ground, and much chaos among workers and field functionaries alike.
- Field functionaries are pushed to meet stiff targets.
- Being short-staffed and inadequately trained, this results in many technical and unforeseen errors.
Aadhaar hastily implementation for the MGNREGA
- A case in point is the rushed manner in which Aadhaar has been implemented for the MGNREGA.
- Several MGNREGA payments have been rejected, diverted, or frozen as a consequence.
- In the last four years alone, more than ₹1,300 crore of the MGNREGS wage payments have been rejected due to technical errors such as incorrect account numbers or faulty Aadhaar mapping.
- There have been no clear national guidelines to rectify these.
MGNREGS payments getting diverted
- There are numerous cases of MGNREGS payments getting diverted to Airtel wallets and ICICI bank accounts.
- In a recently concluded survey on common service centres in Jharkhand for Aadhaar-based payments, it was found that 42% of the biometric authentications failed in the first attempt, compelling them to come later.
- This continued harassment faced by people would have been a more humane question to address rather than brushing them aside as “teething problems” and build a new scheme on similar shaky platforms.
- The success of the PM-KISAN is contingent on there being reliable digital land records and reliable rural banking infrastructure, which are both are questionable.
- While ₹75,000 crore has been earmarked for this scheme, the MGNREGA continues to be pushed to a severe crisis.
- The MGNREGA allocation for 2019-20 is ₹60,000 crore, lower than the revised budget of ₹61,084 crore in 2018-19.
- In the last four years, on an average, around 20% of the Budget allocation has been unpaid pending payments from previous years.
- Thus, subtracting the pending liabilities, in real terms, the Budget allocation has been lower than 2010-11.
- Despite a letter to the Prime Minister by citizens and MPs in January 2019, (as of February 8) all MGNREGA funds have been exhausted.
- While the country stares at an impending drought, workers languish in unemployment.
MGNREGA not a panacea for all
- The MGNREGA is neither an income support programme nor just an asset creation programme.
- It is a labour programme meant to strengthen participatory democracy through community works.
- It is a legislative mechanism to strengthen the constitutional principle of the right to life.
- That the MGNREGA works have demonstrably strong multiplier effects are yet another reason to improve its implementation.
- Despite all this, the MGNREGA wage rates in 18 States have been kept lower than the States’ minimum agricultural wage rates.
- This acts as a deterrent for the landless.
- Yet, work demand has been 33% more than the employment provided this year — underscoring the desperation to work.
- By routinely under-funding this Act, the present government continues to undermine the constitutional guarantee.
- In an employment programme, adequacy of fund allocation and respectable wages are crucial, so meaningless claims of “highest ever allocation” and other dubious claims are unhealthy for democracy.
- The Central government should focus on improving the existing universal infrastructure of the MGNREGA before plunging into a programme pretending to augment farmers’ income.
[op-ed snap] Fabrication and falsification
Mains Paper 2: Social Justice|Government policies and interventions for development in various sectors and issues arising out oftheir design and implementation.
From UPSC perspective, the following things are important:
Prelims level: Basic knowledge of MGNREGA.
Mains level: The news-card analyses the gross violation in the implementation of MGNREGA.
- A recent study have found that data manipulation in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is leading to gross violations in its implementation.
- At present, crores of people in India are struggling to navigate a host of vulnerabilities to eke out a living.
- A lack of dignified employment, non-payment of adequate wages on time and insufficient food mean that a poor family remain in a dicey situation and staring at starvation.
- In recent years, there have been at least 74 reported starvation deaths, with 60 cases having occurred in the last two years across parts of India; a lot of them have been in Jharkhand.
- Based on a directive by the Union Ministry of Rural Development, the Jharkhand government issued a report on 18 deaths.
- Hastily produced and in insensitive language, the report concludes that none of these deaths was due to starvation or connected to MGNREGA — a lazy, convenient denial of any correlation.
- If implemented the proper way, MGNREGA, among other measures, can go a long way in improving the life and the livelihoods of poor.
- The governments in the State and Centre are demonstrating alarming indifference in this matter and is covering up realities by curating information to suit its false narrative.
- Such curation starts from suppressing information at the source, to deliberately manipulating and obfuscating data to perpetrate falsehoods.
How the manipulation of information is leading to Ethical and Legal violations?
- The MGNREGA is a demand-driven programme, i.e., work must be provided within 15 days of demanding work failing which the Centre must pay an unemployment allowance (UA).
- A UA report is generated but rarely implemented.
- Numerous ground reports across the country suggest that because of a funds crunch, field functionaries do not even enter the work demanded by labourers in the MGNREGA Management Information System (MIS).
- This is information suppression at the source.
- Lack of offline alternatives to capture work demand from labourers means that data on the MIS are being treated as the gospel truth.
- Even this under-registered demand is being dishonoured by the government.
- Although work demand data (in person days) and employment-generated data are available at a panchayat level, aggregate data at the national level are only presented for employment generated.
- Thus, under-registered national demand is captured but intentionally not reported.
- By doing this, the Central government is trying to hide its violation of the extent of under-provision of work.
Key findings of the study
- To estimate the extent of under-provision,work demand and employment generated for over 5,700 panchayats across 20 States (for 2017-18 and the first three quarters of 2018-19) was analysed.
- It was found that this year, the employment generated was about 33% lower than the registered work demand, and last year, about 30% lower.
- If this large-sample trend holds true for the country, then a conservative minimal allocation required this year is about ₹85,000 crore.
- After 99% of the original allocation got exhausted earlier this month, 250 Members of Parliament and citizens wrote to the Prime Minister, following which the Centre’s revised allocation now stands at a paltry ₹61,084 crore.
- Despite this revision, 16 States still show a negative balance which shows the continued lack of funds.
- Further, the Centre’s oft-repeated claims of the “highest ever allocation” are dubious and meaningless because if the allocation does not honour work demand, as is the case here, it is a violation of the Act.
Government’s manipulation of data causing more problem
- Contrary to the Central government’s claims of there being more than 90% payments on time, the study found of more than 9 million transactions that only 21% payments were made on time in 2016-17.The trend continued in 2017-18.
- Further, the Central government alone was causing an average delay of over 50 days in the disbursement of wages to labourers.
- The mandate is to pay wages within 15 days else workers are entitled to a delay compensation.
- While this delay by the Central government (called stage 2 delays) is captured in the system, it is intentionally suppressed to avoid paying delay compensation which is another violation of the Act.
A case of insensitivity
- The Union Ministry of Finance in Aug,2017 acknowledged the accuracy of the study’s findings and stated that delays in payments were directly linked to lack of “[un]availability of funds”.
- This glaring lacuna was argued in the Supreme Court in a recent PIL (Swaraj Abhiyan vs. Union of India) where the judgement categorically stated: “The wages due to the worker in terms of Stage 2 above must be transferred immediately and the payment made to the worker forthwith failing which the prescribed compensation would have to be paid.
- The Central Government cannot be seen to shy away from its responsibility… The State Governments and Union Territory Administrations may be at fault, but that does not absolve the Central Government of its duty”.
- In court, the Central government, agreed to calculate Stage 2 delays, and pay compensation, but the judgement (dated May 18, 2018) has still not been implemented.
- This not only reflects contempt of court by the Central government but is also an insensitive assault on people and a deliberate hiding of the truth.
- In the process, countless lives are getting silently buried in fabricated statistics.
- Such falsification and a manipulation of information by the government is increasing starvation and agrarian distress in India, and isleading to a gross violation of the MGNREG Act.
[op-ed snap] Making every citizen an auditor
Mains Paper 2: Governance | Important aspects of governance, transparency & accountability
From the UPSC perspective, the following things are important:
Prelims level: Not much
Mains level: Importance of social audits
Social audits in India
- Social audits show how people’s participation in the planning, execution and monitoring of public programmes leads to better outcomes
- They have strengthened the role of the gram sabha
- Social audits were first mandated by law in 2005 under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
- Subsequently, Parliament, the Supreme Court and many Central ministries mandated them in other areas as well
- Following a sustained push from the Rural Development Ministry, the CAG and civil society organisations, social audit units (SAUs) have been established in 26 States (Rajasthan, Haryana and Goa are yet to establish them)
Shortcomings in implementation
- The governing bodies of most SAUs are not independent
- Some SAUs have to obtain sanction from the implementation agency before spending funds
- More than half the States have not followed the open process specified in the standards for the appointment of the SAU’s director
- Some States have conducted very few audits and a few have not conducted any
- Several do not have adequate staff to cover all the panchayats even once a year
- The action taken by the State governments in response to the social audit findings has been extremely poor
What needs to be done?
- In 2017, the Supreme Court mandated social audits under the National Food Security Act (NFSA) to be conducted using the machinery that facilitates the social audits of MGNREGA
- Social audits of the NFSA have failed to take off due to lack of funds
- Like the Rural Development Ministry, the Ministry of Consumer Affairs, Food and Public Distribution should give funds to the SAUs and ask them to facilitate the social audits of the NFSA
- Social audit units should have an independent governing body and adequate staff
- Rules must be framed so that implementation agencies are mandated to play a supportive role in the social audit process and take prompt action on the findings
- Also, a real-time management information system should track the calendar, the social audit findings and the action taken, and reports on these should be made publicly available
- The CAG as an institution could partner with local citizens and state audit societies to train them, build capacities and issue advisories on framing of guidelines, developing criteria, methodology and reporting for audit
- Social audit processes need mentoring and support as they expand into newer programmes
- Social audits in India need to become an integral and robust part of the formal audit process
[op-ed snap] A triple blow to job guarantee scheme
Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
From UPSC perspective, the following things are important:
Prelims level: MGNREGA, Minimum Wages Act, 1948, National Electronic Fund Management System
Mains level: The newscard throws light on the institutional bottlenecks in the implementation of the job guarantee scheme
Pending wages under MGNREGA
- The total amount of wages pending under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme for the whole country (2016-17) was around ₹11,000 crore
- This sum is a fifth of the MGNREGA budget announced for the financial year 2018-19
- On the other hand, rising instances of frauds whose amounts exceed far than the requirements of the very job guarantee scheme need to be put in perspective
What the Scheme actually say?
- The scheme is meant to be demand-driven in the sense that the government is mandated to provide work within 15 days of a worker seeking work. Otherwise, the worker is entitled to an unemployment allowance
- A second key provision of the Act pertains to payment of wages within 15 days of completion of work, failing which a worker is entitled to a delay compensation of 0.05% per day of the wages earned
- However, both these provisions have been routinely violated. There is an ongoing Public Interest Litigation in the Supreme Court (Swaraj Abhiyan v. the Union of India) concerning these violations
Three ways in which a lack of funds has led to a subverting of these provisions in letter and spirit
- Budget allocation over the years has been insufficient
- While there has been an increase in the nominal budget in the last two years, after adjusting for inflation, the budget has actually decreased over the years
- The real budget of 2018-19 is much lower than that of 2010-11
- Even this low budget allocation has undergone various kinds of curtailment
- By December of each year, through a bottom-up participatory planning approach, every State submits a labour budget (LB) to the Centre
- This contains the anticipated labour demand for the next financial year
- The Centre, on its part, has been using an arbitrary “Approved Labour Budget” to cut down funds requested by States (using the National Electronic Fund Management System, or Ne-FMS), making this a supply-driven programme
Curtailing the Work-demand of Workers
- Ne-FMS guidelines issued in 2016-17 say the Management Information System (MIS) “will not allow” States to “generate more employment above the limits set by Agreed to LB”
- This meant that the work demand of workers was not even getting registered and the MIS was being used as a means to curb work demand
- Thus the “approved labour budget” puts a cap on funds
Worsening situation due to poor allocation
- The Ministry of Finance memorandum said that the principal reasons for payment delays were infrastructural bottlenecks, unavailability of funds and lack of administrative compliance
- The study findings and this memorandum are at odds with the Centre’s dubious claims of 85% of payments having been made on time
- The poor are paying a heavy price for this throttling of funds by the Centre
- Delinking of MGNREGA wage rates from the Minimum Wages Act (MWA), 1948 has contributed to this
- MGNREGA wages are a less lucrative option for the marginalized, being lower than the minimum agricultural wages in most States
- As primary beneficiaries of the Act, women, Dalits, and Adivasis could be the most affected and pushed to choose more vulnerable and hazardous employment opportunities
- Such contravention of the MWA is illegal
- MGNREGA now faces a triple but correlated crisis — a lack of sufficient funds, rampant payment delays, and abysmal wage rates
- What this reflects is not only a legal crisis created by the Centre but also a moral one where the fight is not even for a living wage but one for subsistence
- One hopes for a just order from the judiciary
Compensation for wage delay in MGNREGA
- Context: Issue of delayed MGNREGA payments in backdrop of drought condition in country
- The Govt of India is directed to ensure that compensation for delayed payment is made to the workers whose wages have been delayed beyond 15 days
- A worker is entitled to compensation at the rate of 0.05% per day for delayed payment of the wages due
- This is mentioned in paragraph 29 of Schedule II of NREG Act and the Guidelines for Compensation for that effect
SC pulls up Centre for delay in MGNREGA payments- II
- Context: Issue of delayed MGNREGA payments in backdrop of drought condition in country
- SC: Govt has made no provision for compensation due to delay while releasing the wages for 2015-16 of Rs 7,983 crores
- It is also regrettable that the government cleared the pending wage bill for 2015-16 only during the pendency of this case
- Welfare: This does not behove a welfare State in any situation, more so in a drought situation & this has affected the Social Justice
SC pulls up Centre for delay in MGNREGA payments
- Context: Issue of delayed MGNREGA payments in backdrop of drought condition in country
- SC: Directed the Centre and the States to make all efforts to encourage needy persons to come forward and take advantage of the MGNREGA scheme
- Slammed the govt for not giving compensation to workers for delayed payment of wages under MGNREGA even during the current drought
- The govt had no provision for providing compensation to the workers & a success rate below 50% is nothing to be proud of
MGNREGS reduced poverty, empowered women
- A survey found that MNREGS reduced poverty overall by up to 32% and prevented 14 million people from falling into poverty.
- MGNREGS has helped many women earn cash income, thereby, enabling them to make independent decisions.
- Children from MGNREGS households were likely to obtain higher levels of educational attainment than their non-MGNREGS peers.
- It increased financial inclusion and declined reliance on moneylenders, saving huge interest payments that is to be paid to moneylenders.
- Some bottlenecks that MNREGS still faces are –
- Paucity of funds at the level of implementations,
- Erratic fund flows
- Inability of all interested households to get 100 days of work.
Cabinet approves direct release of wages to MNREGA workers
- Delayed payments has been a major problem in MNREGS implementation.
- Direct benefit transfer ensures that scheme funds do not get indefinitely parked with the state finance departments.
- In 2014-15, only 28 per cent of the payments could be made on time to the workers under the scheme.
- The average number of days of employment per household under the scheme fell to 40.14 in 2014-15 from 45.97 in the previous year.
[op-ed snap] Is the MGNREGA being set up for failure?
MNREGA has been under constant criticism for being leaky and addressing only the symptom but not the disease.
However,the criticism ignores 2 very important things –
- Nearly all studies on MNREGA show its contribution in removing poverty.
- The voice of actual beneficiaries is hardly heard in any criticism.
Studies reveal that work under MNREGA have helped create rural infrastructure like anganwadis, toilets, rural roads etc. It has also helped in boosting agricultural productivity through development of wasteland/fallow land, and construction of post-harvest storage facilities and work sheds.
- It has been of huge help especially to female headed households.
- In many states, up to half of the MGNREGA income was spent on food, which improved health and nutrition — a critical factor in a country plagued by malnutrition.
- Skill development is necessary but it can effective only on a filled stomach – which MNREGA tries to achieve.
In recent years, effectiveness of MNREGA has not been upto mark because of delays in assigning work to those demanding and late payment of wages.
MGNREGA is a demand-driven scheme.
A widespread denial of work under MGNREGA and endless delays in wage payment would end up killing the demand for work. If that happens, it wouldn’t be long before the program is deemed a failure and wound up for good.
[op-ed snap] Positive expansion
- Acc. to India Meteorological Department’s forecast, we are looking at consecutive drought-like years for the first time since 1987.
- NDA government proposes to extend the number of work entitlement days under the MGNREGA from 100 to 150 in drought-hit districts.
- MGNREGS could bring relief to farm workers and labourers affected by the laying waste of cropland for the rabi cycle due to both unseasonal rain and deficient monsoon.
- The record of success of MGNREGS since its launch in 2006 as a welfare initiative that empowers distressed rural households has been well-documented.
- Its weaknesses, in terms of the quality of assets created and leakages in implementation, are also well-known.
While the “extra 50 days” is a welcome move, there needs to be a better focus on timely wage payments and demand for work under the scheme.
Government mulls to raise number of days under NREGA scheme to 150
The rural development ministry, which is working on the proposal, is of the view that 50 additional days of employment will compensate farmers who have suffered crop loss due to deficient rains.
- On an average, 25% of the rural households seek employment under the Act annually.
- The government had last year extended the number of wage days under MGNREGA to 150 in Uttarakhand in the wake of floods that left thousands dead and missing.
Now, 150 workdays for tribals under MGNREGA
- Those tribals who have received land rights under the Forest Rights Act, 2006, will be eligible for additional 50 days of wage employment under the rural job scheme.
- The additional person days through MNREGA will allow the households to undertake additional work on their own land.
The objective of MGNREGA is aimed at enhancing livelihood security of rural households for creating durable assets and discouraging migration. The focus of the scheme is on water conservation, water harvesting, drought proofing, land development, flood control and rural connectivity among others. The scope of the scheme has also been extended from time to time.